- The Washington Times - Tuesday, May 8, 2001

President Bush cannot stop gasoline prices from rising this summer, the White House said yesterday after pump prices reached a record high.
"If any politician has a magic wand that they can wave over gas prices to lower them, the president … would like to listen to them," White House spokesman Ari Fleischer told reporters yesterday.
The national average for a gallon of regular, unleaded gasoline hit $1.68 Friday, or about 1.5 cents per gallon more than last years record high set June 21, AAA reported yesterday. Prices are about a dollar lower than the highs of March 1981, after adjusting for inflation.
Its even worse in the Washington area. The average pump price in the District stands at $1.75, while the regional average, which includes the District and its Maryland and Virginia suburbs, is $1.69.
Mr. Fleischer said yesterday that the president is more inclined to focus on a long-term solution for rising energy costs than pushing through a short-term fix.
"The focus the president wants to concentrate on is how to solve a permanent problem," he said. "And thats where the core of this matter lies."
Mr. Bush opposes a reduction in the 18-cent gas tax as well as price controls on energy.
"The president is not unsympathetic to those who want to provide an immediate reduction," Mr. Fleischer said, "but wants to remind everybody that the solution is long term and that the risk in Washington is … Washington never gets around to the long-term solutions."
A task force headed by Vice President Richard B. Cheney is expected to release its plan for dealing with the nations energy problems by May 17.
Motorists yesterday were less than thrilled with gas prices, which have risen an average 19 cents in the past month.
At the Exxon station on the corner of Bladensburg Road and New York Avenue in Northeast, a gallon of regular unleaded cost $1.79 yesterday.
There, lawyer Michael Arnold watched his $20 provide him with just 11.1 gallons of gasoline. He stopped filling up the tank of his Jeep Cherokee several weeks ago. He said that if gas prices hit $2 per gallon, he will start taking the Metro to work.
"Its gotten to the point where youre in a mind-set of saying $30 is a lot of money for … gasoline," Mr. Arnold said.
Driver advocacy group AAA wants the president to allow Clean Air Act gas requirements to be suspended this summer in areas where prices are deemed to have reached critically high levels.
The main culprit stems from refinery shutdowns, particularly in the Midwest, which are keeping inventories low. In the Washington area, the price increase is the result of refineries switching from winter to summer blends to meet the clean air requirements, a move that reduces refining capacity briefly, said Justin McNaull, spokesman for AAA Mid-Atlantic.
Prices are highest in California and the Midwest, where the switch from winter to summer blends and low inventories create a one-two punch.
The Federal Trade Commission concluded an investigation yesterday that found no evidence that major oil refiners had violated antitrust laws in marketing West Coast gasoline.
The agencys investigation began three years ago after complaints about widely varying gasoline prices in different parts of California, even though the region was essentially a single market producing similar blend gasoline.
The investigation covered wholesale gasoline markets in California, Arizona, Nevada, Oregon and Washington.
Regional imbalances in supply could mean significant fluctuation in prices, the Energy Information Administration said yesterday in its short-term energy outlook.
"We project that the average monthly pump price for regular gasoline will range between $1.50 and $1.75 per gallon, perhaps more, during the peak months of the driving season," the agency said.
The EIA acknowledged missing the mark on previous gasoline price predictions — as recently as a month ago — that called for an average summer cost of $1.49. The EIA said that in previous outlooks, it misjudged the market reaction to low inventories created when refineries produced natural gas to meet winter heating demands.
It said that "gasoline demand levels levels last year and levels anticipated this year are considerably higher than previously reported."
Refineries are operating at 95.8 percent of their capacity, their highest level since August, the American Petroleum Institute said yesterday.
Meanwhile, Mr. McNaull said AAA is finished trying to predict summer gasoline prices, which have surpassed nearly all projections from both AAA and the EIA.
"Were not willing to put on a blindfold and throw darts," Mr. McNaull said.
But he pointed to several signs that could ease gasoline prices for the rest of the summer, including the fact that oil inventories are several million barrels larger than last month.
A barrel of gasoline goes for about $16.70 more than the cost of crude oil, or about $2.50 more than in December, based on futures prices calculated by Bloomberg News.


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